If you tend to give or receive gift cards around the holidays, or have gift cards you have not yet used, you need to be careful. The cards may not be honored after the holidays if the retail stores are going out of business or have filed for bankruptcy. Filing for bankruptcy doesn’t necessarily mean that they’ll be stopping operations, but it’s not a good sign.

Newspaper and journal articles have circulated with names of 32 retail chains that are closing some or all of it’s stores. Stores that are planning to close after Christmas are still selling the cards through the holidays even though the cards may be worthless January 1. There is no law preventing them from doing this. On the contrary, it is referred to as ‘Bankruptcy Planning. ‘

“There are cases already showing up because gift cards will not be honored because the business is no longer in business,” UAB economics professor Mickey Gee states, ” If you buy a gift card, buy it from a company you think will be in business. Give it to the recipient and tell them not to wait to use the gift card.”

He says stores that have filed for bankruptcy aren’t required to honor the cards unless a judge orders them to do so. In those cases, Gee says there could be stipulations. He cited Sharper Image that is allowed to redeem gift cards after you’ve spent 200 dollars.

Instead of a store specific gift card, you might want to consider giving a VISA or Mastercard gift card which the recipient can use anywhere. If you do give a store brand gift card, just make sure the store locations near the recipient are not targeted for closing or can be also be used for online purchases if the store has an ecommerce site.